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Spotlight: Are You Sold?

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Spotlight: Are You Sold?

Date Published:
Tuesday, March 8, 2011

Businesses are constantly searching for novel, creative ways to get their products and services in front of consumers. We live in a world where marketing is pervasive — we receive pitches through subtle product placement in movies, advertisements on Facebook and other Internet sites, messages sent directly to our inboxes, as well as through traditional media such as magazines, television and billboards.

Dr. James Oakley, UNC Charlotte associate professor of marketing in the Belk College of Business, is interested in how businesses generate interest in their wares and how their practices impact consumers, for better or worse.

The following is a preview of an article that will appear in the upcoming issue of UNC Charlotte magazine. To find out what Oakley thinks about everything from applying neuroscience to marketing, the value of the Consumer Confidence Index and what “green” means in today’s economy, look for the next issue of UNC Charlotte magazine in March.

Prescription drugs are now marketed like any other product — shampoo, food, cars, etc. What are some of the ethical implications?

More than a decade ago the pharmaceutical companies got permission to advertise. They’ve always advertised, usually by sending representatives to interact directly with doctors, but they weren’t allowed to advertise a particular drug as a solution for a particular problem until 1997.

Dr. James Oakley, UNC Charlotte associate professor of marketing in the Belk College of Business, is interested in how businesses generate interest in their wares and how their practices impact consumers, for better or worse.

The pharmaceutical industry has been extremely good at lobbying Congress to keep the regulators away from them. The practice of sending pharmaceutical representatives into doctor’s offices historically has been treated as hands-off by the regulators. But as pressure grew to clamp down a little harder on that practice, the pharmaceutical companies argued successfully that if regulations were going to close off that marketing practice, they would need to be able to market elsewhere. That was the impetus to advertise directly to consumers.

There are benefits of direct marketing to the consumer — consumers are more educated about their choices and presumably are better able to discuss them with their doctor. But when the information presented in the advertising is inaccurate, it does more harm than good. The federal Food and Drug Administration (FDA) continues to reprimand drug companies for creating ads with misleading and sometimes false information, including claims of benefits from the drug that haven’t yet been proven. There is significant pressure on drug companies to promote their products, particularly new drugs that have been brought to market after expensive research and development. In fact, the pharmaceutical industry spends nearly twice as much on promotion as it does on research and development.

In 2006, pressure to regulate pharmaceutical-industry marketing practices grew. So the industry stepped forward with its own set of regulatory guidelines in an effort to forestall actual regulation. Now they have a heavily regulated industry, in terms of their product, but a very unregulated marketing apparatus. There’s no one out there monitoring the advertising; the companies merely react when a consumer complains.

I’ve been working on a project with Denis Arnold, associate professor of management and Surtman Distinguished Scholar in Business Ethics, to look at the ethics of pharmaceutical advertising and the industry’s compliance with regulation. Initially we wanted to examine the whole industry’s practices for a four-year period, but that proved to be cost-prohibitive. Instead, we looked at a particular class of drugs — erectile dysfunction drugs — over a four-year period and found that, at least for this class, the industry doesn’t do a very good job of following its own guidelines. We identified ethical concerns in the marketing practices for these drugs, and faxed our complaints to the companies that manufacture them. For months the faxes wouldn’t go through. Eventually one did get through, but it’s been six months since they received the fax and we haven’t heard anything from them. We tried mailing the complaint … it may get somewhere, but no one’s looking at it. Essentially, the industry has done a good job of marketing the concept of self-regulation, but a poor job of following up with consumers.

Our paper about the study has been submitted to the Journal of Public Policy and Marketing. If this paper is well-received, maybe it will spur interest in looking at the whole industry.

Photo by Robert S. Donovan